This situation, by the way, is only temporarily good news for the
company owners. Because, by pumping so little back into the
economy in the form of employee wages (and capital investments —
the other area where companies are scrimping), our companies are
constraining the growth of the economy.

Why?

Because the rank-and-file employees of America's corporations are
also mainstream American consumers — the folks who account for
~70% of the spending in the economy.

Almost every dollar these folks earn in salaries gets spent — on
food, clothing, houses, education, entertainment, cars, and other
goods and services that big American companies produce.

So, if, instead of hoarding their wealth by hiking their profit
margins ever higher, companies invested more in employees and
equipment, they would help the whole economy.

And the companies would also, of course, help their employees —
the people who are dedicating their lives to helping the
companies earn such vast profits.

It's an "ownership society," all right. Everyone else
is getting the shaft.Bloomberg

You might think that voluntarily helping employees by sharing
more profits with them would be something corporations would be
very eager to do.

After all, again, these employees are dedicating their lives to
making the companies so successful.

But, no.

The business-ethos pendulum in this country has now swung so far
toward "profit maximization" that most American companies would
never dream of voluntarily sharing more wealth with their
employees.

These employees, after all, are not viewed as people. They're
viewed as "costs" — cash outflows that just leech financial value
from owners.

In a healthy capitalist ecosystem, companies serve several
constituencies, not just owners. Namely, they serve:

Owners

Customers

Employees, and

Society

In today's version of American capitalism, however, too many
companies are mostly serving only one constituency: Owners.
"Profit maximization" is the number one — and, in many cases,
only — priority.

This is a private-sector issue, not a government issue.
This is about persuading American companies to share
more of their wealth with their employees, so the government
doesn't have to get involved. As conservatives are fond
of observing, the government cannot solve all the problems in
this country. The private sector has to do it. So, it's time the
private sector started doing it.

American companies are now so obsessed with profit maximization
that they are content with millions of their full-time employees
being below the poverty line (Walmart, Starbucks, McDonalds, et al).

Think about that for a minute.

Some of the richest, most revered companies in this country —
companies that are currently generating record-high profits — pay
their full-time employees so little that they're poor.

Even more depressing is the fact that concepts like "fairness"
and "sharing" are now seen as evidence of bleeding-heart
socialist tendencies — as though the only way to be a bona
fide capitalist is to treat your employees like costs and
pay them as little as possible.

Even Scrooge would be
appalled.

Capitalism doesn't have to be like that. Specifically, it doesn't
have to be all about "profit maximization." Companies can be very
successful and their owners can do very well with the companies
making only a reasonable profit, not the
highest-possible one.

These days, American companies have record-high profits, and
American company owners are doing just fine.

The American economy and average Americans, meanwhile, are still
hurting.

So it's time big American company owners voluntarily shared a bit
more of their wealth with the people who help create it for them
— by paying their employees more. This won't just help the
employees. It will help the whole economy.

(And, for what it's worth, I say that not just as a writer but as
the owner of an American company. Business Insider doesn't yet have record
profit margins — or any profit margin, for that matter —
but we still pay our team as well as we can. And "profit
maximization" will never be the primary goal here, at least while
I am in charge.)